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Thursday, May 06, 2021 9:40:48 AM
Filing an involuntary bankruptcy petition against a company is, of course, serious business, and the consequences of failing are equally serious.
Once filed, an involuntary petition cannot be dismissed without a notice and an opportunity for a hearing, even if the petitioning creditors and the company agree.
If the involuntary petition is dismissed, the petitioning creditors can be liable for costs and attorney’s fees of the company.
If the bankruptcy court determines that the involuntary petition was filed in bad faith, the petitioning creditors can be liable as well for damages caused by the involuntary filing and even for punitive damages.
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